Consumer sentiment remains positive, but pressured families are starting to feel the pinch

Published at 16:30 PM on 19 January 2017

A quarter of British consumers expect to be better off in 2017 than they were last year, according to PwC’s latest consumer sentiment survey.

That’s marginally up on previous surveys in 2016 and 2015, where 21% and 22% respectively, expected to be better off over the following 12 months.

On the other hand, 26% of respondents expect to be worse off in 12 months’ time than they are today.

PwC surveyed over 2,000 consumers across England, Scotland and Wales and found that issues like pay and the National Living Wage was encouraging a feel-good factor, while worries over the economy tended to have the opposite effect.

The trends in sentiment since 2008 are summarised below:

Commenting on the survey results, Kien Tan, director at PwC said:

“Our survey results reflect the fact that many consumers’ personal circumstances have been improving in the past year, with falling unemployment and the National Living Wage being reflected in many people’s pay packets.

“For example, when asked why they felt better off, 34% cited pay increases and 30% an improvement in their personal prospects. Conversely, of those who thought they would be worse off, the number one reason cited was the economy – by 50% of respondents.

“However, breaking down the figures in more detail, for the first time, those in the 45-54 and 55-64 year old age groups were the most pessimistic, with 31% and 34% expecting to be worse off next year respectively. This marks a departure from our previous surveys where the 65+ age group has historically been the most pessimistic. Indeed, there has been a marked deterioration in sentiment amongst the 35-44 and 45-54 year olds since our September survey. These ‘pressured families’ are least likely to have benefited from wage and pension increases, and most likely to have been affected by inflation on fuel and holidays.”

Lisa Hooker, partner at PwC added:

“The survey also breaks down where consumers expect their spending to be directed over the coming year. On balance consumers expect to spend less on almost all areas of outgoings, from holidays and going out to clothing and household goods.

“The only category where they expect to spend more is on groceries, although the main reason for this is higher prices, cited by 81% of those expecting to spend more.

“This will set a challenge for retailers and leisure operators across different categories who will need to adapt their strategies in order to encourage consumers to keep spending with them, even if they plan to buy less overall.”

Ends

Notes to Editors:

About the Survey:

PwC undertook itsregular survey of consumer sentiment in late December 2016.

We asked questions to a nationally representative sample of 2,009 consumers across England, Wales and Scotland.

We have been measuring consumer sentiment every 3-4 months since 2008, using the question:“Thinking about your disposable income (after household bills, credit cards, etc.), in the next 12 months do you expect your household to be better off or worse off?”

About PwC:

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 223,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

For more information please contact Stephen Young on stephen.m.young@pwc.com/07789808745

About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

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At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.